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SAC Capital Settlement With SEC Set For March 28 Hearing

March 22 (Bloomberg) -- The U.S. Securities and Exchange
Commission’s proposed $616 million insider-trading settlement
with hedge fund SAC Capital Advisors LP will be the subject of a
March 28 hearing in Manhattan federal court.

U.S. District Judge Victor Marrero in Manhattan, who is
presiding over the case, today set a conference on the proposed
judgment. On March 15, SAC, the fund run by billionaire Steven
A. Cohen, agreed to pay the record sum to settle U.S. regulatory
claims that two of its units engaged in insider trading.

The accord stems from allegations that Mathew Martoma, a
former CR Intrinsic portfolio manager, illegally obtained
confidential information about a clinical trial of an
Alzheimer’s drug being developed by Elan Corp. and Wyeth LLC
from a doctor who was working on it.

The settlement of the civil allegations against the units
doesn’t preclude the SEC from pursuing Cohen himself in the
future, George Canellos, the agency’s acting enforcement
director, said last week.

The SEC investigation continues, as does the criminal case
against Martoma, who has been charged with insider-trading by
prosecutors in the office of Manhattan U.S. Attorney Preet
Bharara. Martoma has pleaded not guilty and his case is pending.

Settled Claims

Cohen was linked in November to alleged illegal trades by
Martoma in a case U.S. prosecutors described as the most-lucrative insider-trading scheme ever, with profits and averted
losses of $276 million.

SAC and its affiliates settled the SEC’s claims without
admitting or denying wrongdoing. SAC unit CR Intrinsic Investors
LLC agreed to pay almost $602 million and Sigma Capital will
forfeit about $14 million, the SEC said.

The Sigma settlement stems from the case involving Jon
Horvath, a former SAC technology analyst who pleaded guilty to
passing nonpublic information to his portfolio manager. The SEC
alleges that Horvath’s tips earned the fund more than $6.4
million in profits and avoided losses with tips fed to two
portfolio managers.

SAC manages $15 billion, 60 percent of which is Cohen’s and
his employees’ money. Cohen hasn’t been sued personally by the
SEC or charged with a crime.

Jonathan Gasthalter, a spokesman for SAC, declined to
comment on the court date.

The criminal case is U.S. v. Martoma, 12-02985, and the
civil case is SEC v. CR Intrinsic Investors LLC, 12-08466, U.S.
District Court, Southern District of New York (Manhattan).